IRFC Receives Rs 231-Crore GST Demand Notice From Tamil Nadu Tax Authority

Indian Railway Finance Corp. on Wednesday said it received a goods and services tax demand order totalling Rs 230.55 crore from the Tamil Nadu tax authority.

The notice, issued by the assistant commissioner from the sales tax division in Chennai North, comprises a tax demand of Rs 209.59 crore and penalty of Rs 20.96 crore, IRFC said in an exchange filing.

The public sector firm added that "the officer has disallowed certain GST credit and raised GST demand for reverse charge mechanism for the financial year 2020–21”.

However, IRFC asserted that based on its assessment, "the aforesaid demand is not maintainable and the Company is evaluating all options including filing an appeal against the order".

The company’s statement pointed out that “there is a provision for recoverably of taxes/adjustments under Leasing Arrangement with Ministry of Railways".

IRFC further added that it did not see any material impact on its financials, operations or other activities due to the tax demand notice.

Earlier, this month, the government-owned undertaking had informed the exchanges that it has appointed Ajoy Choudhury as its chief risk officer from Dec. 2, and that he will be working on a contractual basis for a fixed tenure of two years.

In October, IRFC's board had agreed to finance 20 rakes at Rs 700 crore for NTPC Ltd. The 20 rakes were procured under the general-purpose wagon investment scheme under the Ministry of Railways.

In the quarter ended Sept. 30, IRFC had posted a 4.4% rise in net profit to Rs 1,613 crore compared to Rs 1,545 crore in the same period last year.

The corporation’s income grew 2% to Rs 6,900 crore in the July–September period in comparison to Rs 6,762 crore in the year-ago quarter.

Shares of IRFC closed 5.14% higher at Rs 164.91 apiece on the NSE, compared to a 0.13% decline in the benchmark Nifty 50.